As presented in the “Reconciliation of GAAP to Non-GAAP” tables in the
accompanying press release, each of the non-GAAP financial measures
excludes one or more of the following items:

Acquisition related. Acquisition-related
charges are not factored into management’s evaluation of potential
acquisitions or IDT’s performance after completion of acquisitions,
because they are not related to the Company’s core operating
performance. Adjustments of these items provide investors with a basis
to compare IDT’s performance to other companies without the variability
caused by purchase accounting. Acquisition-related expenses primarily
include:

Acquisition related costs such as legal, accounting and other
professional or consulting fees directly related to an acquisition.

Fair market value adjustment to acquired inventory sold.

Restructuring related. Restructuring
charges primarily relate to changes in IDT’s infrastructure in efforts
to reduce costs and expenses (gains) associated with strategic
divestitures and restructuring in force actions. Restructuring charges
(gains) are excluded from non-GAAP financial measures because they are
not considered core operating activities. Although IDT has engaged in
various restructuring activities in the past, each has been a discrete
event based on a unique set of business objectives. As such, management
believes that it is appropriate to exclude restructuring charges (gains)
from IDT’s non-GAAP financial measures as it enhances the ability of
investors to compare the Company’s period-over-period operating results
from continuing operations. Restructuring-related charges (gains)
primarily include:

Severance and retention costs directly related to a restructuring
action.

Gain on divestiture consists of gains recognized upon the strategic
sale of business units.

Assets impairments including accelerated depreciation of certain
assets no longer in use and impairment charge related to a note
receivable and subsequent recoveries.

Other adjustments. These items are excluded
from non-GAAP financial measures because they are not related to the
core operating activities and on-going future operating performance of
IDT. Excluding this data allows investors to better compare IDT’s
period-over-period performance without such expense, which IDT believes
may be useful to the investor community. Other adjustments primarily
include:

Loss (gain) on deferred compensation plan securities represents the
changes in the fair value of the assets in a separate trust that is
invested in corporate owned life insurance under our deferred
compensation plan.

Tax effects of non-GAAP adjustments. Effective first quarter of fiscal
2016, the Company changed its methodology for reporting non-GAAP taxes
to be based on estimated cash tax expense and reserves. The Company
forecasts its annual cash tax liability and allocates the tax to each
quarter in proportion to earnings for that period. This approach is
designed to enhance the ability of investors to understand the impact
of the Company's tax expense on its current operations, provide
improved modeling accuracy, and substantially reduce fluctuations
caused by GAAP to non-GAAP adjustments, which may not reflect actual
cash tax expense. Non-GAAP tax amounts for periods prior to March 30,
2015 have not been adjusted to reflect the new methodology.

Diluted weighted average shares non-GAAP adjustment, for purposes of
calculating non-GAAP diluted net income per share, the GAAP diluted
weighted average shares outstanding is adjusted to exclude the
benefits of stock compensation expense attributable to future services
not yet recognized in the financial statements that are treated as
proceeds assumed to be used to repurchase shares under the GAAP
treasury method.

IDT and the IDT logo are trademarks or registered trademarks of
Integrated Device Technology, Inc. All other brands, product names and
marks are or may be trademarks or registered trademarks used to identify
products or services of their respective owners.

INTEGRATED DEVICE TECHNOLOGY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(In thousands, except per share data)

Three Months Ended

June 28,

Mar. 29,

June 29,

2015

2015

2014

Revenues

$

160,907

$

158,350

$

126,302

Cost of revenues

61,673

60,295

52,293

Gross profit

99,234

98,055

74,009

Operating expenses:

Research and development

33,754

32,071

32,050

Selling, general and administrative

28,143

27,050

25,459

Total operating expenses

61,897

59,121

57,509

Operating income

37,337

38,934

16,500

Other income, net

1,818

1,966

862

Income from continuing operations before income taxes

39,155

40,900

17,362

Provision for income taxes

435

517

251

Net income from continuing operations

38,720

40,383

17,111

Discontinued operations:

Gain from divestiture

-

-

16,840

Loss from discontinued operations

(547

)

(799

)

(12,153

)

Provision for (benefit from) income taxes

15

318

(45

)

Net income (loss) from discontinued operations

(562

)

(1,117

)

4,732

Net income

$

38,158

$

39,266

$

21,843

Basic net income per share - continuing operations

$

0.26

$

0.27

$

0.11

Basic net income (loss) per share - discontinued operations

-

(0.01

)

0.04

Basic net income per share

$

0.26

$

0.26

$

0.15

Diluted net income per share - continuing operations

$

0.25

$

0.26

$

0.11

Diluted net income (loss) per share - discontinued operations

-

(0.01

)

0.03

Diluted net income per share

$

0.25

$

0.25

$

0.14

Weighted average shares:

Basic

148,396

148,326

149,283

Diluted

153,758

154,111

153,741

INTEGRATED DEVICE TECHNOLOGY, INC.

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (a)

(Unaudited)

(In thousands, except per share data)

Three Months Ended

June 28,

Mar. 29,

June 29,

2015

2015

2014

GAAP net income from continuing operations

$

38,720

$

40,383

$

17,111

GAAP diluted net income per share continuing operations

$

0.25

$

0.26

$

0.11

Acquisition related:

Amortization of acquisition related intangibles

832

1,001

2,549

Restructuring related:

Severance and retention costs

921

-

526

Facility closure costs

-

-

47

Assets impairment and other

147

265

2,302

Other:

Stock-based compensation expense

7,866

5,684

4,962

Gain from divestiture

(51

)

(168

)

-

Assets impairment and other

(325

)

-

-

Compensation expense - deferred compensation plan

115

213

494

Gain on deferred compensation plan securities

(108

)

(205

)

(480

)

Non-GAAP tax adjustments

83

(1,391

)

(859

)

Non-GAAP net income from continuing operations

$

48,200

$

45,782

$

26,652

GAAP weighted average shares - diluted

153,758

154,111

153,741

Non-GAAP adjustment

1,836

1,558

1,867

Non-GAAP weighted average shares - diluted

155,594

155,669

155,608

Non-GAAP diluted net income per share continuing operations

$

0.31

$

0.29

$

0.17

GAAP gross profit

$

99,234

$

98,055

$

74,009

Acquisition related:

Amortization of acquisition related intangibles

617

625

1,686

Restructuring related:

Severance and retention costs

182

-

23

Assets impairment and other

147

220

1,935

Other:

Compensation expense - deferred compensation plan

42

78

147

Stock-based compensation expense

682

589

319

Non-GAAP gross profit

$

100,904

$

99,567

$

78,119

GAAP R&D expenses:

$

33,754

$

32,071

$

32,050

Restructuring related:

Severance and retention costs

(347

)

-

(240

)

Assets impairment and other

-

(45

)

(367

)

Other:

Compensation expense - deferred compensation plan

(45

)

(83

)

(240

)

Stock-based compensation expense

(3,632

)

(2,266

)

(2,521

)

Non-GAAP R&D expenses

$

29,730

$

29,677

$

28,682

GAAP SG&A expenses:

$

28,143

$

27,050

$

25,459

Acquisition related:

Amortization of acquisition related intangibles

(215

)

(376

)

(863

)

Restructuring related:

Severance and retention costs

(392

)

-

(263

)

Facility closure costs

-

-

(47

)

Other:

Compensation expense - deferred compensation plan

(28

)

(52

)

(107

)

Stock-based compensation expense

(3,552

)

(2,829

)

(2,122

)

Non-GAAP SG&A expenses

$

23,956

$

23,793

$

22,057

GAAP interest income and other, net

$

1,818

$

1,966

$

862

Gain from divestiture

(51

)

(168

)

-

Gain on deferred compensation plan securities

(108

)

(205

)

(480

)

Assets impairment and other

(325

)

-

-

Non-GAAP interest income and other, net

$

1,334

$

1,593

$

382

GAAP provision for income taxes - continuing operations

$

435

$

517

$

251

Non-GAAP tax adjustments

(83

)

1,391

859

Non-GAAP provision for income taxes - continuing operations

$

352

$

1,908

$

1,110

(a) Refer to the accompanying “Notes to Non-GAAP Financial Measures”
for a detailed discussion of management’s use of non-GAAP financial
measures.